How low is to low?

When we put the new wheels on we were questioning if my car was at the best ride height for handling. What I've always "heard" is that you want to the front control arms to be parallel with the ground when the car is at rest on the ground. Is this true?

As a generalization, yes, but it depends on a few thousand other factors. As a basic premise, having the lower control arm parallel with the ground will help make a more predictable camber curve. If the lower arm is parallel, it will start arcing inward anytime it goes up or down. If its static setting is angled upward toward the wheel after you lower it, it will start arcing inward during compression, but go outward and THEN inward as you rebound. In many applications it can be fine, but not optimal.... but everybody does it :) Most of the time a lowered autocross car is so stiffly sprung that the lower arms only move 1" in a race anyway, so not much camber change will ever happen.

It also depends on what type of suspension; strut, SLA, etc. From the factory, GM shipped three models of B-body in the 90s; the regular caprice, the 9C1 cop car caprice, and the Impala SS. They all differed in one way; springs. The Caprice was the tallest, the 9C1 was about 3/4" lower than that, and the Impala SS was about 1.5" lower yet. My SS has been further lowered another 2", so to say that the LCA position is overly important would be incorrect.

i hate to lower a car especially if i drive it every day. The stock camry I drive is a pain to take out of the driveway and its worse if theres people staying in the rear seats. I scraped under the front bumpers, tail pipe, the resonator. Really annoying

I'm afraid I don't have specifcs on the E30, but would agree with others who say that the car is too low when either suspension travel or geometry (or both) is/are compromised to the point where it no longer works as well.

With most 70's and early 80's Datsuns and Toyotas, the common approach with the struts up front is to lower the car a bit with springs and shocks and then use a spacer between the bottom of the strut and the top of the steering knuckle/ball joint to correct for the roll center change and also minimize bump steer at the same time. A further potential benefit is that some are designed with a little bit of static negative camber (or at least with a few sets of holes for different options) which is usually recommend for front Mac struts in performance applications.

Does a BMW use a similar enough setup that such a spacer might be possible?

I gotta say... my Impala is nearly 18 feet long, and I can't fit my fist under the frame. If I want to put my car on a lift, I have to first drive it onto some 2x8 lumber, then get a jack under it, then I can fit the arms of my 2-post lift under the frame. It is my daily driver with 125k on the clock. Sure, the front skirt drags a bit, and if I'm a stupid idiot the tailpipes drag, but lowering a car is a choice you should make irrespective of things like curbs and driveways. My uncle has the steepest driveway I know, and Los Angeles is known for its sharp driveway entrances. No worries. Take them at an angle. For me the teeny inconvenience of taking things at an angle is WAY overshadowed by the look, handling, and sex I get from having a lowered car.

In this photo, also notice my lowered E30 which also had no issues, but was a blast to drive.